Investors paid 91.97p per share in the New Listing for this property, and it became available on the Resale market May 31st 2016.
These modern flats in Hendon are our greenest properties to date. They benefit from solar panels, rainwater collection butts and special air filtration systems that actually generate additional income for investors. Being in the attractive and well-connected area of Hendon, there is potential for strong growth as more commuters are pushed out of London. View a short video from our Director of Property on why this is a great investment.
- The investment comprises 3 flats in Hendon plus a 50% share of the Freehold interest of the entire building, and is geared at 50% loan-to-value (LTV) of the purchase price. Gearing gives enhanced exposure to property price movements, and the potential for amplified returns; though investors must note amplified negative returns if prices fall
- Brent Cross Cricklewood, located close to our properties, is set for a complete £4bn regeneration. Planning permission was granted in 2010 for 7,500 homes, 3 rebuilt schools, new parks, community facilities and improved transport infrastructure
- Hendon is a very well connected area serviced by tube, rail and busses. Further, it has great road links to the rest of London and the UK
- London’s population continues to grow much faster than it can build new housing, so people are moving out from the centre. Hendon should continue to be attractive to wealthy professionals who are willing to commute to have more living space
- Hendon is a family friendly location with vast amounts of green space available, one of London’s largest shopping centres - Brent Cross, and Middlesex University all within walking distance
- Our exit strategy is to sell the units individually rather than as a single investment, thereby realising the discount that we have secured from buying in bulk.
You can read more on the investment case, here.
The mortgage is provided by a major high street bank and has a two-year fixed interest rate of 3.32%. After this two-year period, the interest rate will switch to a variable rate based on the bank's base rate. At that point, we will assess the situation and either continue with the variable rate or fix the interest rate for an additional period. We have assumed a constant cost of debt and no rental growth in our annual income forecast. Please refer to our blog post on geared property for further details.
This investment comprises 3 three-bedroom flats within a 7 flat building plus a 50% share of the Freehold interest of the entire building. The flats were acquired in good condition and the Chartered Surveyor's report identifies no material issues. We have made a provision of £1,800 for any remedial works that further testing reveals. There is also a provision of £7,200 for furnishings.
The total rent forecast for the 3 flats is £78,142 per annum. The number of vacant flats may vary month to month. For prudence we have factored into our forecasts an annual void rate of 1.9% and have not included any growth in rental values.
At the current level of rent, Gross Rental Yield would be 4.18% and the forecast Dividend Yield 2.49% (fully accounting for and after mortgage interest payments, purchase costs, furnishings, remedial cosmetic works, forecast maintenance, annual voids, corporate taxation and all fees). Since April 2016 UK taxpayers are entitled to a £5,000 annual dividend allowance. See our FAQs here for more information.
For prudence, we have not included any growth in rental values in our forecasts - any growth in rent will be incremental to our forecasts.
This transaction was approved by our RICS qualified Director of Property.
This investment comprises 3 three-bedroom purpose built flats - Flat 1 (lower ground), Flat 3 (ground) and Flat 7 (second floor).
Flat 1 has the benefit of a private patio to the front and rear. All 3 flats enjoy access to the rear communal gardens.
The building benefits from 4 off-street parking spaces.
- Share Valuation
- House Price Index
- Rental Income Breakdown
- Latest Valuation
- Latest Share Valuation
- Latest Property Value
- Amortised Purchase Costs
- - £865,000
- Deferred Tax
- - £14,368
- Latest Valuation
Note: The estimates provided do not constitute valuation advice; it remains your responsibility to determine valuation.
The HPI is an official statistic that captures changes in the value of residential properties across England and Wales. It is published by the Land Registry, which is a UK government organisation.
Note: Past performance is not a reliable indicator of future results.
Residential property investment is a total returns product. This information is the income component only. Increasing capital values have historically driven most of the return.
- Gross Rent per year (E)
- Service Charges
- - £0
- Gross Rental Revenue
- = £78,142
- Gross Rental Yield
- - £51,472
- Annual Interest Payment
- Letting and Management
- Property Insurance
- Allowance for possible voids
- Maintenance Allowance
- Corporation Tax
- Dividends per year
- = £26,670
- Dividend Yield
Note: UK taxpayers are currently entitled to a £5,000 annual dividend allowance. This means that the total income related tax you pay is no greater than if you were to own the property directly. Gross rent and dividends may be lower than estimated. Tax treatment depends on individual circumstances and may be subject to change in future. See FAQs for more information on taxation. The Dividend Yield assumes an investment at the Latest Valuation.
Flats 1, 3, 7 - 1 Graham Road, London, London, NW4 3DH,